Oct 23, 2017 | Laboratory News, Laboratory Pathology, Managed Care Contracts & Payer Reimbursement
Push to expand the reach of health savings plans should help consumers pay for out-of-pocket medical laboratory services and other healthcare expenses
High-deductible health plans (HDHPs) continue to impact hospitals, clinical laboratories, and anatomic pathology groups due to the strain they put on healthcare consumers who struggle to pay their medical bills. Even worse, studies show patients are skipping doctor visits and scheduled medical laboratory tests to avoid paying the full costs of the visits. That’s why the market for Health Savings Accounts (HSAs) has grown in popularity. HSAs enable patients to take control of their healthcare and plan for the inevitable bills.
And grown it has! As of June 30, there were more than 21 million HSAs in the United States, with holdings of about $43 billion in assets. That’s according to a survey by Devenir, a healthcare account investment advisory and research firm. By the end of 2019, Devenir projects the HSA market will exceed $60 billion in assets held in nearly 30 million accounts.
This steep growth curve in HSA accounts is good news for medical laboratories and pathology groups because it indicates consumers are taking advantage of these tax-advantaged savings accounts to set aside funds needed to pay their high-deductible health bills.
HSAs Help Both Patients and Provider, including Medical Laboratories
According to the survey Devenir conducted in July 2017, which primarily reflected data from the largest 100 HSA providers, the typical HSA investment account holder has a $15,146 average total balance in deposits and investments.
“We continue to see impressive HSA growth, especially amongst those HSA assets held in investments as consumers begin to understand how HSAs can help them save for both their current and future healthcare expenses,” noted Jon Robb, Devenir Senior Vice President of Research and Technology, in a statement.
HSAs were authorized by the Medicare Prescription Drug Improvement and Modernization Act of 2003 and entered the market in January 2004. Ever since the major provisions of the Affordable Care Act (ACA) came into play in 2014, HSA accounts have grown significantly in size and popularity, as have HDHPs. From 2015 to 2016, HSA accounts recorded a 22% increase in assets year over year, Devenir reported.
HSAs Could Double Under American Health Care Act
Under current law, HSA accounts must be paired with an HDHP. For 2017, the IRS has defined “high deductible” as any deductible higher than $1,300 for an individual or $2,600 for a family, so a health insurance plan must meet that threshold for a consumer to qualify for an HSA. In addition, annual contributions are capped at $3,400 individuals or $6,750 for families. Those over 55 can contribute an extra $1,000.
Devenir’s study, which drew on data from the period ending June 30, 2017, illustrates the steep growth in HSAs since 2006, and projects the growth to continue well into the decade. (Image copyright: Devenir.)
But a boom in HSA accounts may be on the horizon if Republicans succeed in replacing Obamacare. Provisions of the GOP-backed American Health Care Act (AHCA), which stalled this summer after passing by a narrow vote in the House of Representatives, would nearly double HSA contribution limits and introduce other changes that would spur growth.
“Whatever direction healthcare reform goes, it is clear that the HSA will be a key component of consumers’ financial decisions in healthcare,” wrote Steve Christenson, Executive Vice President at Ascensus, in 401K Specialist. “After all, HSAs and HDHPs were market-driven prior to the enactment of the ACA and continued to be with its passage. The economy will continue to drive this trend as employers seek to attract and retain employees in this tight job market.”
HSA contributions can be invested and grow tax free as long as withdrawals are used for qualified medical expenses. Because accounts move with healthcare consumers if they change jobs or insurers, HSAs are viewed as excellent investment options.
“HSAs offer tax breaks no other retirement vehicle can match,” stated Begonya Klumb, CEO of UMB Financial Corporation Healthcare Services, in a CNBC interview.
HSAs Great Opportunity for Elderly to Control Their Healthcare
Even if Republicans fail to revamp healthcare, HSA industry leaders are expected to continue to look for ways to expand into additional markets. According to a Kaiser Health News article, companies that manage HSA accounts are “eager to reach new markets, including baby boomers in Medicare and enrollees in the military’s Tricare system, for whom—under current law—HSAs are off-limits.”
Eric Remjeske, President and co-founder of Devenir, believes those over 65 would seize upon an opportunity to use an HSA account to help offset Medicare’s cost sharing expenses.
“That is a great population that has the potential to save and really take more control over their healthcare,” Remjeske told Kaiser Health News.
Industry officials are confident HSAs will continue their upward trajectory, attracting new customers and additional healthcare dollars.
“The political and economic winds are favorable and most definitely pushing HSAs,” Kevin Robertson, Senior Vice President and Chief Revenue Officer for HSA Bank, the industry’s third-largest company, told Kaiser Health News.
What’s good for the HSA industry also may prove to be good for medical laboratories. If more healthcare consumers turn to HSAs to pay their out-of-pocket medical costs, including clinical laboratory services, the fear that increased enrollment in high-deductible plans will cause a reduction in the utilization of clinical lab tests may prove to be unfounded.
—Andrea Downing Peck
Related Information:
Health Savings Account Assets Reach 42.7 Billion in June
2016 Year-End Devenir HSA Research Report
What Health Care Confusion Means for HSA’s Future
Health Savings Accounts Are the Big Winner as Republicans Hash Out an Obamacare Replacement
Companies Behind Health Savings Plans Could Bank on Big Profits Under GOP Plan
Hospitals, Pathology Groups, Clinical Labs Struggling to Collect Payments from Patients with High-Deductible Health Plans
Growth in High Deductible Health Plans Cause Savvy Clinical Labs and Pathology Groups to Collect Full Payment at Time of Service
Because of Expanded Numbers of Patients with High-deductible Health Plans, Patients Are Now Responsible for 30% of Hospital Revenues
Health Savings Accounts Change Collection Model for Doctors, Soon Pathologists
Mar 14, 2014 | Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology
Targeted at employers and their employees, myEasyBook is designed to help consumers with high-deductible health plans save 30% or more when picking a provider
It is rare for a national health insurance company to use the 2014 International Consumer Electronics Show in Las Vegas to unveil a new online healthcare service, but that’s exactly what UnitedHealthcare Group (NYSE: UNH) did. On January 7, it took the wraps off its new myEasyBook healthcare shopping service.
Clinical laboratory managers and pathologists should take note of this development. It is one more example of how prominent healthcare companies want to help consumers shop for healthcare providers by providing information about quality and price in an easy-to-use format. Every medical laboratory should be thinking about when and how it wants to make its quality information and lab test pricing readily available to consumers. (more…)
Apr 13, 2010 | Coding, Billing, and Collections, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Management & Operations
With more and more consumers participating in high-deductible health plans, health savings accounts, and other forms of consumer-directed health plans, physicians and laboratories have to collect substantially more money from their patients. Collecting from patients while they are still in the physician’s office is the ideal situation, but must patients don’t know what their copayment, deductible, or out-of-pocket is for any given service. In many cases, that means that the physician must bill the insurer, wait weeks for a settlement, and then bill the patient for the balance. Patients are somewhat unlikely to pay a bill for services rendered in the distant past.
To help with the problem of in-office collection, Companion Technologies has created a card reader that accepts patients’ credit, debit, or insurance cards called Companion Direct POC. These small machines feature a keypad, a screen, and a printer that prints a patient receipt. The process works in 4 quick steps:
1. Run healthcare card through Companion Direct POC healthcare card reader and enter patient-specific information
2. Patient information sent to appropriate payer
3. Plan information and eligibility sent back in seconds
4. Print receipt and eligibility information directly from card reader
The systems are inexpensive, running about $20 per month plus a 20-cent per transaction fee. For this nominal fee, doctors can insure that a patient knows what s/he owes before s/he leaves the office.
On January 9, 2007, Companion Technologies was purchased from BlueCross BlueShield of South Carolina and sold to The Thurston Group and ABRY Partners. Now that Companion Technologies has more financing than BlueCross BlueShield of South Carolina was able to provide this small part of its operations, Dark Daily predicts that Companion Technologies will expand its promotion and implementation of real-time eligibility verification systems across the country at a rapid pace.
Laboratories can expect to be effected in a number of ways by the spread of real-time eligibility verification and real-time claims settlement. First, patients will become accustomed to eligibility verification/claims settlement services from physicians offices and will expect to see them in laboratories, as well. This means laboratories must be prepared to deal with patients on a cash basis, accepting cash, credit cards, and health debit cards. Second, laboratories and pathology groups should enjoy a better collection ratio for patient-billed services because of the real-time billing. Aspiring laboratories will make proactive responses to this trend and see it as an opportunity to create a competitive advantage, keep existing clients, and grab more market share.
Related Articles:
Thurston Group and ABRY Partners Purchase Companion Technologies Corporation
Payers Begin Speeding Up Payment to Physicians The Dark Report, November 2005
Jul 16, 2008 | Laboratory News, Laboratory Pathology
With a national election approaching, political rhetoric about different views of current health programs is heating up. Two Democratic members of Congress from California released a report in May claiming that Health Savings Accounts (HSAs) are used more often as a tax shelter for the wealthy than as a path to health benefits for working- and middle-class families. Their report was based on a Government Accountability Office (GAO) study that indicated that HSAs may not be benefiting the intended population.
The GAO study indicated that the average adjusted gross income for an individual with an HSA was $139,000 in 2007. Total contributions to these accounts in 2005 equaled twice that of withdrawals-$754 million compared to $366 million, respectively. Between the initial introduction of HSAs in 2004 and 2007, participation grew from 438,000 to 4.5 million accounts, according to the GAO study.
This GAO report came after the release, in April, of a Kaiser Family Foundation study determined that most uninsured households don’t have the assets to cover costs associated with consumer-driven health plans (CDHPs), including HSAs. Meanwhile, America’s Health Insurance Plans (AHIP) announced that more than 6.1 million Americans are covered by HSA-eligible insurance plans. Based on the GAO’s finding that 4.5 million Americans currently participate in HSAs, that means that some 1.6 million Americans are not taking advantage of their HSA plan. HSA plans were available to 35% more individuals than the previous year according to AHIP.
As this election cycle heats up, there is likely to more rhetoric about the advantages and disadvantages of consumer-directed health plans (CDHPs), high-deductable health plans (HDHPs), and health savings accounts (HSAs) for specific socio-economic groups. Laboratories and pathology groups have a stake in the healthcare debates that take place during this election cycle. After all, the political spectrum of ideas ranges from the ideal of a single payer system with mandated universal coverage to the ideal of a health system built around consumer choice, open networks, and a variety of health benefits plans and options to fit the needs and pocketbooks of different consumers.
Related Articles:
HEALTH SAVINGS ACCOUNTS: Participation Grew, and Many HSA-Eligible Plan Enrollees Did Not Open HSAs while Individuals Who Did Had Higher Incomes(GAO Report)
Modest Number Of Uninsured Families Have Sufficient Assets To Cover Cost Sharing In HSA-Qualified Plans (News Release about Kaiser Family Foundation Study)
Health savings accounts mostly used as tax shelter for rich: GAO (Modern Healthcare subscription required)
Apr 19, 2007 | Laboratory Pathology, Managed Care Contracts & Payer Reimbursement, Management & Operations
Health Savings Accounts (HSAs) are on the rise in the United States. According to a fact sheet from the White House this month, “The number of Americans with HSAs has tripled from one million in March 2005 to the more than three million reported in January 2006. The number of Americans with HSAs is currently projected to increase to 29 million by 2010.” These accounts consist of a contribution made by an employer to an employee’s tax-free savings account. The HSA is combined with a high-deductible insurance policy ($1,000 to $5,000) to help people pay pre-deductible expenses.
People with HSAs love the accounts because they can use the money in their account for over-the-counter medications, massage therapy, lasik eye surgery, and other “elective” medical procedures. When a real emergency does arise, however, HSA account holders often find their account under-funded and have trouble paying their medical bills.
Because payment in the HSA scenario is the responsibility of the patient and not the patient’s insurance company, providers of all types need to get in the habit of collecting from the patient at the time the service is rendered —or even before it is rendered (in the case of routine procedures with predictable costs). The days of billing patients in the weeks following a procedure are coming to an end. Unlike post-service claims with health insurance companies, patients are far less likely to respond to an after-the-fact bill.
The upside to collecting for patients with HSA accounts at the time of service is that most HSA account holders have a debit card connected directly to their account which they can use to pay their medical provider. Therefore, if they have the money in their account, they will usually be amenable to paying at the time of service.
The HSA insurance model creates new payment for pathology group practices, because there is no direct contact with the patient. So how can a pathology practice prepare to deal with patients covered by HSA insurance plans? First, when HSA patients come into a patient service center to provide specimens, it is a good proactive measure to notify them in writing that they will be responsible for payment at the time the tests are done. Second, office staff must be trained to know the different types of insurance policies and to know that HSA patients must provide payment at the time of the test. They should have the knowledge needed to help HSA account holders realize that they can use their HSA debit card to pay.
Finally, both clinical laboratories and pathology groups must be prepared to deal with the new type of patient-consumer that has an HSA account. These patient-consumers will look at medical services like retail commodities. They will balance cost and quality in making a decision on which medical facility, laboratory, or physician to use. For this reason, laboratories must develop patient-friendly price schedules for all laboratory services. These should be competitive with the cost of services offered at comparable laboratories. HSA-insured patients are likely to seek out laboratories with prices that match or beat competitor’s prices. Adapting to HSA account holders will require a significant effort by laboratories. However, the drastic reduction in lag time between services rendered and payment received lower the patient default rate. In the long run, that should make laboratories more profitable.
Related Information:
HSAs: A new paradigm in payment and collections
Fact Sheet: Health Savings Accounts: Affordable and Accessible Health Care
